Instructions For Form 8582cr - Passive Activity Credit Limitations (Page 11 of 16) in pdf

tax on the net passive income. If you

rental real estate activities in which

income rules. For information on

have an overall loss on an entire

you actively participated (other than

recharacterization of income, see

disposition of your interest in a

rehabilitation credits and low-income

Pub. 925 or Temporary Regulations

passive activity, reduce net passive

housing credits). See Rental

section 1.469-2T(f).

income, if any, on Form 8582, line 4,

Activities, earlier, for details.

to the extent of the loss (but not

When figuring modified adjusted

Line 9. Married persons filing

below zero) and use only the

gross income, any overall loss from

separate returns who lived apart from

remaining net passive income in the

an entire disposition of an interest in

their spouses at all times during the

computation below. If you had a net

a passive activity is taken into

year must enter $75,000 on line 9

passive activity loss, enter -0- on line

account as a nonpassive loss if you

instead of $150,000. Married persons

6 and go to line 7.

do not have any net passive income

filing separate returns who lived with

after combining net income and

Figure the tax on net passive

their spouses at any time during the

losses from all other passive activities

income as follows.

year are not eligible for the special

(that is, Form 8582, line 4 is a loss or

allowance. They must enter -0- on

A. Taxable income

zero). If you do have net passive

line 16 and go to line 17.

including net

income when you combine the net

passive income . . . . .

Line 10. To figure modified adjusted

losses and net income from all other

B. Tax on line A* . . . . . . . . . . . . . .

passive activities, the overall loss

gross income, combine all the

C. Taxable income without

amounts used to figure adjusted

from the disposition is taken into

net passive income . . .

gross income except do not take into

account as a nonpassive loss only to

D. Tax on line C* . . . . . . . . . . . . . .

account:

the extent that it exceeds that net

•

passive income.

Any passive activity loss as defined

E. Subtract line D from line B

and enter the result on

in section 469(d)(1),

Line 12. Do not enter more than

Form 8582-CR, line 6 . . . . . . . . .

•

Any rental real estate loss allowed

$12,500 on line 12 if you are married

to real estate professionals (defined

* For Form 1040, use the Tax Table, Tax Computation

filing a separate return and you and

under Activities That Are Not Passive

Worksheet, or other appropriate method you used to

your spouse lived apart at all times

figure your tax. For Form 1041, use the Tax Rate

Activities, earlier),

Schedule, Qualified Dividends Tax Worksheet, or

during the year. Married persons filing

•

Any overall loss from a PTP,

Schedule D, whichever applies.

separate returns who lived with their

•

The taxable amount of social

Note. When using taxable income in

spouses at any time during the year

security and tier 1 railroad retirement

the above computation, it is not

are not eligible for the special

benefits,

necessary to refigure items that are

allowance. They must enter -0- on

•

Deductible contributions to

based on a percentage of adjusted

line 16 and go to line 17.

traditional individual retirement

gross income.

accounts (IRAs) and section

Line 15. Figure the tax attributable

Line 7. If line 7 is zero because the

501(c)(18) pension plans,

to the amount on line 14 as follows.

tax on the net passive income on line

•

The domestic production activities

6 is greater than your credits from

deduction,

A. Taxable income . . . . . . .

passive activities on line 5, all your

•

The deduction allowed for

credits from passive activities are

B. Tax on line A* . . . . . . . . . . . . . .

self-employment taxes,

allowed. In this case, enter the

C. Enter amount from Form

•

The exclusion from income of

amount from line 5 on line 37 and

8582-CR, line 14 . . . . . .

interest from series EE and I U.S.

report the credits on the forms

D. Subtract line C from line

savings bonds used to pay higher

normally used. Do not complete

A . . . . . . . . . . . . . . . .

education expenses,

Worksheets 5 through 9.

•

E. Tax on line D* . . . . . . . . . . . . . .

The exclusion of amounts received

under an employer’s adoption

F. Subtract line E from line B

Part II—Special

assistance program,

and enter the result on

•

Form 8582-CR, line 15 . . . . . . . .

The student loan interest

Allowance for Rental

deduction, or

Real Estate Activities

•

The tuition and fees deduction.

* For Form 1040, use the Tax Table, Tax Computation

With Active Participation

Worksheet, or other appropriate method you used to

Include in modified adjusted gross

figure your tax. For Form 1041, use the Tax Rate

income any portfolio income and

Schedule, Qualified Dividends Tax Worksheet, or

Married persons filing

Schedule D, whichever applies.

expenses that are clearly and directly

separate returns who lived

allocable to portfolio income. Also

Note. When using taxable income in

with their spouses at any time

include any income that is treated as

CAUTION

during the year are not eligible to

the above computation, it is not

nonpassive income, such as overall

complete Part II.

necessary to refigure items that are

gain from a PTP and net income from

based on a percentage of adjusted

Use Part II to figure the credit

an activity or item of property subject

gross income.

allowed if you have any credits from

to the recharacterization of passive

-11-

Instructions for Form 8582-CR (Rev. 01-2012)

Instructions For Form 8582cr - Passive Activity Credit Limitations Page 11

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